The Family Office: SFO vs. MFO Blueprints
The Family Office: SFO vs. MFO Blueprints
The $100M question: When to build in-house (SFO) versus outsourcing (MFO), and the “Virtual” middle ground.
Executive Summary
- The $100M Threshold: Generally, a full Single Family Office (SFO) requires $100M+ in AUM to justify the $1.5M-$2M annual operating overhead (approx. 1-2% cost drag).
- MFO vs. VFO: For estates under $100M, a Multi-Family Office (MFO) or a Virtual Family Office (VFO) offers institutional access without the HR burden.
- Control Premium: SFOs provide 100% privacy, customization, and no conflict of interest, but require managing a C-suite team (CIO, CFO, GC).
The “Overhead” Trap
Building an SFO too early (e.g., at $30M AUM) is a wealth destroyer. Fixed costs (staff, tech, rent) can easily exceed 3-4% of assets, eroding returns faster than market alpha can generate them.
Mechanic: Structural Economics
$100M+
SFO Min AUM
$1.5M+
Annual OpEx
VFO
Hybrid Model
Control
SFO Benefit
Simulation: Cost Efficiency ($200M AUM Scenario)
Total Annual Cost: MFO Fees vs. SFO OpEx
| Feature | Multi-Family (MFO) | Single-Family (SFO) |
|---|---|---|
| Cost Structure | % of AUM (Variable) | Fixed Salaries/Ops |
| Privacy/Control | Shared Resources | Absolute Control |
| Ideal Asset Size | $10M – $100M | $100M – Billion+ |
“If you have seen one Family Office, you have seen one Family Office. But the laws of math apply to all: Scale determines structure.”
Essential Resources
INTERNAL
BMT Playbooks